Bithumb’s $44 Billion Bitcoin Blunder: How a Decimal Error Nearly Crashed Crypto Markets in February 2026
- What Exactly Happened During Bithumb's Bitcoin Debacle?
- How Did Bithumb Contain the Damage?
- Why Does This Incident Matter Beyond Bithumb?
- What's Next for Crypto Exchanges After This Fiasco?
- FAQs About the Bithumb Bitcoin Incident
In what could have been the most expensive typo in financial history, South Korean exchange Bithumb accidentally distributed 620,000 BTC (worth $44 billion) due to a decimal point error during a routine promotion. The February 6, 2026 incident triggered a localized flash crash of 17% on Bithumb's platform before the exchange recovered 99.7% of funds within 35 minutes. This near-catastrophe exposes critical vulnerabilities in centralized crypto infrastructure just months after the October 2025 exchange meltdowns.
What Exactly Happened During Bithumb's Bitcoin Debacle?
Picture this: you're a Bithumb user expecting a $1.50 promotional credit, only to wake up to 2,000 BTC ($140,000 at the time) in your account. That's exactly what happened to 695 lucky (and momentarily terrified) traders when Bithumb's systems misinterpreted the reward amount. "We've seen fat finger trades before, but this was more like a fat finger tsunami," quipped BTCC analyst Mark Chen in our conversation about the event.
The error occurred during what should have been a routine marketing campaign. Instead of distributing $1.50 worth of rewards, the system credited users with 2,000 BTC each - creating a surreal scenario where nearly half a million BTC (about 3% of Bitcoin's total supply at the time) suddenly changed hands. TradingView charts show the immediate aftermath: Bitcoin's price on Bithumb nosedived to $55,000 while other exchanges maintained prices around $70,000.
How Did Bithumb Contain the Damage?
In a display of crisis management that WOULD make any exchange CEO sweat, Bithumb's team:
- Froze all affected accounts within 35 minutes
- Recovered 99.7% of erroneously distributed BTC
- Prevented the local crash from spreading to other exchanges
Scott Melker, the trader who first spotted the anomaly, told me: "I've seen exchange glitches before, but watching $44 billion appear out of thin air? That's a first even for crypto." The rapid response likely saved Bithumb from insolvency - recovering all but 1,860 BTC of the erroneous distribution.
Why Does This Incident Matter Beyond Bithumb?
This isn't just about one exchange's mistake. The February 2026 incident reveals three systemic risks in crypto markets:
| Risk Factor | Impact |
|---|---|
| Centralized Exchange Vulnerabilities | Single points of failure can disrupt entire markets |
| Liquidity Fragmentation | Price discrepancies between exchanges create arbitrage risks |
| Regulatory Scrutiny | South Korean authorities are now considering on-site inspections |
Remember the October 2025 exchange outages? Binance, Coinbase, and Kraken all buckled under trading volume. Now Bithumb shows how operational errors can be just as dangerous as technical failures. "It's like we fixed the roof for hurricanes, then got flooded by a burst pipe," one BTCC engineer remarked anonymously.
What's Next for Crypto Exchanges After This Fiasco?
The industry is scrambling to restore confidence. Coinbase recently reported reducing erroneous account freezes by 82%, while Binance launched a $400 million compensation fund. But as my colleague at CryptoQuant noted, "No amount of insurance funds can buy back trust lost to preventable errors."
Current bitcoin metrics show the market remains fragile. The NUPL (Net Unrealized Profit/Loss) indicator suggests long-term holders are still in pain from the 2025 downturn. Meanwhile, exchange reserves continue declining as users move to self-custody - perhaps the ultimate vote of no confidence in centralized platforms.
FAQs About the Bithumb Bitcoin Incident
How much Bitcoin did Bithumb accidentally distribute?
Bithumb erroneously sent 620,000 BTC (worth $44 billion at the time) to 695 users due to a decimal point error in a promotional campaign.
How quickly did Bithumb respond to the error?
The exchange froze affected accounts within 35 minutes and recovered 99.7% of the funds, leaving about 1,860 BTC unaccounted for.
Did this affect Bitcoin's global price?
Only on Bithumb's platform, where BTC temporarily crashed 17% to $55,000. Other exchanges maintained prices around $70,000 during the incident.
What lessons does this teach about crypto exchanges?
The event highlights how centralized exchanges remain single points of failure, with both technical and human vulnerabilities that can disrupt markets.
